Renault and Nissan have agreed a truce with the French government over a growing political row that threatened jobs in the UK.
The French government has agreed to limit its interference in the operations of the carmakers in return for Nissan not increasing its influence on Renault.
The partnership between Renault and Nissan was thrown into crisis after the French government, led by the economy minister and former Rothschild banker Emmanuel Macron, increased its stake in Renault to 19.7% and introduced laws that double the power of long-term investors in the company.
Critics feared that Macron was attempting a backdoor nationalisation of Renault and would use his powers to protect and generate jobs in France, such as moving production from Nissan’s factory in Sunderland, the biggest in the UK, across the Channel.
Renault owns 43.4% of Nissan, meaning the French government would have had significant power over the Japanese company. Paris would have controlled more than 30% of the voting rights in Renault from April, making it the biggest shareholder and allowing it to dictate its strategy and operations.
However, the government has now agreed to limit its voting rights in Renault to 17.9%, except in exceptional circumstances such as a takeover or decisions directly linked to Renault’s operations in France.
Renault and Nissan have also agreed that the French company will not interfere in Nissan’s governance. In return, Nissan will not increase its 15% shareholding in Renault, or convert it into voting rights.
The two companies formed the Renault-Nissan Alliance in 1999, which led to Renault taking a 43.4% stake in Nissan, and Nissan taking 15% in Renault. Carlos Ghosn, the chief executive of Renault and Nissan, welcomed the deal with the French government, which was announced after a Renault board meeting.
“Today was an important day for the future of the Renault-Nissan Alliance,” he said. “After months of discussions, I am happy to say that an agreement has been reached that builds on our heritage and strong foundations to achieve further sustainable growth and success of the two partners.
“While there were important short-term issues to address, it was imperative that all involved took a long view. We now look forward to all parties returning their focus to day-to-day operations to pursue sustainable growth for Renault and Nissan and to increase performance through additional Alliance synergies.”
The deal will be a relief to the workforce of more than 6,000 people at Nissan’s plant in Sunderland, given the concerns that the French government could use its influence to move production from the plant to France.
It is understood that Nissan will have the right to increase its stake in Renault to 25% if the French government or Renault breach the terms of the agreement.
The alliance accounts for one in 10 cars sold around the world, but since 1999 Nissan has grown significantly faster than its French partner.
Some analysts expressed disappointment that the new agreement did not involve the alliance being radically overhauled.
Dominic O’Brien, an analyst at Exane BNP Paribas, said: “There has arguably never been a better time for Renault-Nissan to push through material changes to its structure. It would be a very disappointing outcome if Ghosn is unable to use the current state of affairs to deliver this change.”
